Pakistan Faces Bankruptcy, Wants $100bn Handout
By Cernig Tuesday Oct 07, 2008 10:30am
Demonstrators outside the Islamabad Stock Exchange in July
The UK's Daily Telegraph reports that Pakistan may be the first nation to go bankrupt as a result of the continuing global financial meltdown.
Officially, the central bank holds $8.14 billion (£4.65 billion) of foreign currency, but if forward liabilities are included, the real reserves may be only $3 billion - enough to buy about 30 days of imports like oil and food.
Nine months ago, Pakistan had $16 bn in the coffers.
The government is engulfed by crises left behind by Pervez Musharraf, the military ruler who resigned the presidency in August. High oil prices have combined with endemic corruption and mismanagement to inflict huge damage on the economy.
Given the country's standing as a frontline state in the US-led "war on terrorism", the economic crisis has profound consequences. Pakistan already faces worsening security as the army clashes with militants in the lawless Tribal Areas on the north-west frontier with Afghanistan.... Mr Zardari told the Wall Street Journal that Pakistan needed a bail out worth $100 billion from the international community.
"If I can't pay my own oil bill, how am I going to increase my police?" he asked. "The oil companies are asking me to pay $135 [per barrel] of oil and at the same time they want me to keep the world peaceful and Pakistan peaceful."The ratings agency Standard and Poor's has given Pakistan's sovereign debt a grade of CCC +, which stands only a few notches above the default level.
The economic crisis might yet end Pakistan's newly elected government, which is facing a crisis of confidence already as it battles 25% inflation, a drowning currency and a President with a reputation as "Mr 10%" for past corruption. It's also unclear that even a $100 billion bailout would be enough to stave off Pakistan's money woes, since the security situation is itself feeding the economic crisis there - investors don't want to know about a nation so obviously on the verge of failure.
Nor is it certain that even the US and Western allies will care to throw such a large sum of money into Pakistan. Sure, they could probably secure protestations of working harder to enact economic reforms after the mismanagement of the Musharraf years and to more strongly pursue the War on Terror, but what would those promises be worth? The question "whose side is Pakistan on?" is being asked in NATO circles nowadays, and more are coming to the conclusion that the Pakistani feudal elite are content to play the West for all it is worth while caring precious little for their own people's fate. Then again, Pakistan has nukes and the prospect of a truly failed state there is a terrible one to contemplate. As usual with that nation, the situation is a Gordian Knot created by decades (dating back at least to Reagan and the Russian invasion of Afghanistan) of local and Western leaders ignoring very real problems. It's a knot with no easy, or short-term, solution. It will take decades of strategic containment, careful stick and carrots, law enforcement outwith Pakistan to catch the terrorists it gives safe haven to and some simple truth-telling to roll all that back. There are no fixes with a timeline of less than decades.
And, as John Robb at Global Guerrillas writes, don't expect Pakistan to be the last nation to find itself on the financial brink.
The global financial system is much LARGER, FASTER, and COMPLEX than the nation-states that are trying to bail them out. As a result, nation-state intervention won't return things to the status quo. What it will do, however, is tightly couple western nation-states to the now inevitable failure in the financial system (this is akin to lashing a dingy to the Titanic to prevent it from sinking). The rampant proliferation of bankrupt and hollow states is now likely inevitable.
If you've a good idea on where to go from here, you're doing one better than national leaders across the globe.
Crossposted from Newshoggers
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Great ...
Here is a country armed to the teeth with Nuclear Warheads/Missiles that if the country falls apart, then we have a very serious problem on our hands.
Forget Iran, or anything else the warmongering right spew out.
But hey, we're making progress and don't forget Bush's administration has a strong dollar policy. ;)
Hey Sister Nancy, brothers Reid and Blunt...
Can you spare a 100bill for our friends? :)
That thing we are standing on?
It's called the "brink."
And it appears to be crumbling all around the edges
Forget the brink. We're at the point where we've run off the cliff and the Cartoon Law of Gravity* is about to assert itself in a painful fashion.
*Where Wil E. Coyote runs off the cliff, the Road Runner points down, Coyote looks, and noticing he's standing on thin air, promptly falls.
Why isn't Bernanke arrested for this catastrofuck?
You would need to arrest Greenspan first
Bush was just on tv and one of the things he offered small businesses was to "have faith". I guess he could try telling that to Pakistan.
There was an asterisk at the end of that statement:
"Faith not valid if worshiping non-Christian deity."
faith doesn't put food on your family.
Priceless...
This moron needs to simply stay off of television.
I was surprised to see him at all. He was at some small business blabbering away about how the bailout was necessary and saying all the same shit we have been hearing for the last two weeks. I guess they found the handfull of people who will still clap for him and yuck it up at his lame jokes.
He had a question and answer part at the end of his speech. He said, I'll take a few questions. I know it's hard to ask the president questions.
Hell, I would have no problem at all asking him a question, it would be his answer that I would find difficult to take.
... faith that criminals like Richard Fuld over at Lehman Brothers will be walking off with $350 million in bonuses while sponging off the taxpayers to clean up their 'mistakes'.
... faith that Bush Administration will saddle an Obama Administration with as much debt as possible, then smile and shrug as W. giddyaps off to Paraguay, just like he's run from every other failed endeavour in his adult life.
... faith that Henry bin Paulson and Ayman ben Bernanke will be queuing up with another outlandish request for $$$$ to clean up the mess.
... faith that the only judgment Bush will see will be in hell, because the Democrats dropped the ball.
I thought I read somewhere that the new president of Paraguay was going to have an extradition treaty put in place with the US, just so the Bush Crime Family couldn't live there?
Also heard that Iceland beat Pakistan to the punch as the first one bankrupt??..
Listening over the summer to World Soccer Daily on Sirius! Seems that the Icelandic owner of one of the EPL teams was a banker. Icelandic banks financed a lot of European construction projects that flopped. We're not the only country that went idiotic with deregulation.
Don't know if the government there is bankrupt just yet, but they're on the precipice.
that's our biggest problem with Pakistan and their possible government...faith.
Bush was on tv today? No wonder the stock market fell another 500 points.
The fall of man will be by their own hand.
who was it who uttered: "He would would build on false grounds, the greater he builds, the greater is his ruin"....I believe they were speaking of George W. Bush - the worst president ever in the history of this country.
Just saw a new gallup poll - 9% satisfaction level of americans with the way this country is heading.....
I'm wondering why Obama's poll isn't even higher right now. It's in the election hacker's best interest to keep it as 50/50 as possible so their dirty work might go undetected though....so....??
Somebody please hit the "reload from last save" button?
Was freaking hysterical!! Can we go back 8 years, please? I think a prior backup is preferable.
They've hit the system restore button 700 billion times. Let's see how that works out.
Yeah, and that way all the folks who don't like the new C&L site can get the old one back, too!
You caused it - now you cought it up! Americans are fed up with your shenanigans.
the people will push the two of them into the well this time.
Remove the power of the banks completely. Nationalise them all, including the central banks. Let governments take back the power to issue currency.
The Federal Reserve and others have made this situation. The bankers profits must be siezed by governmental fiat, and asset forfeiture laws, and the culprits jailed.
So who do we borrow the money from to give or lend to Pakistan? Maybe Iraq?
Watching the hearing today on AIG makes you want to gag. I hope the guys testifying have bodyguards because they have made so many people angry, they may need them.
A long time ago, I can remember reading 'A Japan that can say No' written by a right-wing Japanese minister and former head of Sony. Basically, and I'm hugely paraphrasing now, it was their belief that systems based on manufacturing (Japan) would not collapse, as their transactions were based on goods. On the other hand, systems based on the movement of money to create wealth (US) were destined to collapse, essentially because they were just a big shell game.
I've done some reading lately to see how everyone is faring financially, but are their countries (besides China and Saudia Arabia) still doing alright, or are we all going down together? Just wondering...
You mean the same Japan that had propped worthless real state and banks to the point that when their very own version of the "bubble" pooped a long while ago it took them almost 1 decade to recover?
We are all in the same boat, it doesn't matter if you manufacture goods or not. As long as you depend on credit as your economic engine, you are bound to experience the same cycles of shenanigans...
Many Asian countries did not buy into these worthless securities. (I live in Korea.) While it'll be bumpy for everyone, everywhere, in many Asian nations people save 1/3 of their income in the bank!!!! How much do Americans save? America lives on credit. Japan has moved more in the American direction the last 30 years, but not so much for the rest of Asia. They save save save. They also buy and keep gold in their houses.
In the 1997 Asian crisis, the Koreans raised billions by taking their personal gold to the banks, for an I.O.U. They all got paid back too.
But their government did interject 1.8 billion into their own economy about two weeks ago.
Iceland just nationalized its bank and is on the brink of bankruptcy. Europe and Asian markets are as shaky as those in the US. Smaller Euro countries which don't deal with debt are doing ok (Poland, for example has +6.2 GDP).
I'm trying to gauge whether or not running down Main Street, waving my arms over my head and screaming like a loon, is an appropriate reaction right now...
I'm thinking: Yes. Yes, it is.
I think Mr.10% is going to have a hard time convincing other countries to help him.
I guess he could threaten to have a nuke garage sale. That might stir up some quick cash.
Ultimately, that's what's going to happen. Only it'll be the Taliban's dime, and we'll end up with what we set in motion when we ran off to play cowboy hero in Iraq.
A militant Islamic state with nukes.
Or to paraphrase your comment, a fu*king nightmare
Yep, that's the unspoken part of the threat.
Give us $100,000,000,000 or the nukes go other places.
Or the next thing you know it'll be a bunch of Pakistani getting facials and staying in fancy hotels on our dime.
Or spend 440,000 dollars to stay at a posh resort after we had bailed them out like the hot shots of AIG did.
Wasn't that was Musharaf was pretty much doing: Live the life on other people's dime?
Heck, he even had enough to spare some to finance some of the 9/11 hijackers via the Pakistani Intelligence Agency. I mean, with friends like these...
I won't be surprised if it turns out Musharraf's got a Swiss bank account full of Benjamins. I mean seriously, the guy took over the Pakistani government in a military coup. Is anyone surprised at the corruption?
I'd like to know what happened to those pallets of 9 billion dollars that were shipped to Iraq a few years ago.
They wouldn't be hamstrung by principles or the conventions of anti-proliferation that prevents the USofA from spreading nuke technologies to, say, India...
oh, wait...
Oh this is bad. This is real real bad.
You betcha its bad. Didn't President Obama mention that Pakistan was the most dangerous place when McMelanoma was talking about Bomb Bomb Bombing Iran?
If you missed bush speaking a while ago, you can catch it now on C-span.
I'd rather spend hours puking up nothing particular that is no longer in my stomach.
I was just trying to be fair and balanced. In case anyone here felt the need to suffer, I was offering an opportunity. ;)
a far, far better person than I, m'dear. ;-)
Thanks but no thanks. I'm done with that guy. What's he gonna say? Have "faith"? Ha ha ha, yeah, right. Besides he's always made me sick.
Vigilance is required.
Cuz for it to work, ya gotta ignore reality, clap REAL HARD, and BELIEVE.
Otherwise, it's just a flashlight behind a curtain...
"And no amount of clapping will bring you back from where I'm going to send you, Miss Bell ..."
-- Captain James Hook (Dustin Hoffman), "Hook"
Maybe they should just go shopping?
I say let them burn.
Why so? Do you have any comprehension of such a move? You must be one of those darkie haters.
I'm surprised Pakistan didn't call President Dumbfuck and told him "get us 100 billion or we're bombing India, mother fucker!".....they must have noticed the pork added on that 700 bil.
I've had my head in the sand for the past eight years. Can somebody tell me how the Bush administration has worked out?
having it up your arse. As to your question, not so good.
You wouldn't want to know. If someone went into a coma eight years ago and woke up today....they would freakin' shoot themselves.
ROFLMAO! You ain't kiddin', POP!
Here he is in full disgusting bigoted flagrantia: His name is Mike Scott, Lee County Sheriff and he needs to be charged with "inciting violence" at the McCain/Palin rally yesterday. He needs to be charged with this crime immediately and removed from his position. More to follow on how to send email protests for the removal of this "domestic incitor to violence and death threats".
Thanks.
The only good thing that could possibly come out of this is greater cooperation in ridding Pakistan of the Taliban and capturing Osama bin Laden.
In this case $100bn worth of cooperation.
Here's the coverage and here's his crime:
http://www.cbsnews.com/blogs/2008/10/06/polit...
But this is hardly a crime. It's Obama's middle name. BFD, IMHO. Let them scream it from the rafters. It is taken as a slur and shows them as being shitty people.
It says a lot about the kind of people that attend these rallies, that deliberately saying a Kenyan sounding name will incite this type of reaction. When I heard this and the "kill him" remarks, I thought to myself that this sounded more like a Klan rally that a presidential campaign, unless (of course) McCain is campaigning for Grand Wizard.
Yes, a name is benign, but the right needs to stop with coy bs. The name Hussein has a specific connotation with Americans, especially redneck, white-trash, uneducated ones, the spawn of former Klan members who have been steeped in racism since birth.
The real question here is "how low will McCain go?" We know Palin will do whatever it takes. She has amoral ambitious cu** written all over her.
Funny, but this doesn't seem a bit 'mavericky' to me.
She is supposed to be a leader. She is vying for being our supreme #2 leader.
This guy is a fucking cop who maybe broke the law by wearing his uniform while speaking at a political rally.
He did not say anything whatsoever that was inciteful other than Obama's middle name. While that is a slur on the right, just like calling us Lefties or the dems the Democrat party, big fucking deal.
Palin is more inciteful than this clown cop. And she should be held to a higher standard.
Palin fails on every single level. Period.
this sucks.
Just how many countries has GW Bush screwed up? I can't keep count.
Let's see...he's economically destroyed 3...Iraq (although with a budget surplus that may not be true...although...they may simply be holding OUR money), Pakistan and the United States. Now, destroyed the social structure of 4...Iraq, Afghanistan, Pakistan and the United States. Hmmm...created serious internal problems for....the United States, Russia, the Balkans, UK, France, Germany, pretty much all of Latin America....hmmm...this is where I lose count.
hey it's only money
Excuse me, but doesn't this country have at least five nukes?
Offer them $80 Billion for all their nukes, centrifuges, and operational control of their Nuclear reactors/reprocessing capabilities. Then haggle from there.
India is a smart country and within back packing distance of Pakistan.
It would be in India's best interest to buy from Pakistan all their nukes, centrifuges, and operational control of their Nuclear reactors/reprocessing capabilities.
For some shiny new enrichment facilities and a brace of new reactors. To be paid for by US military aid money, no doubt, because they've no other kind left in Pakistan. No, honestly.
If this sounds like satire to you, welcome to the close of the Bush Years.
Regards, C
Bush's reign better not end with so much as a single mushroom cloud.
The USA is no longer in a position to set terms for others. Your power is on the decline. Get used to it.
Apparently all this unfettered free market capitalism ain't really all its cracked up to be at all... But the fallout? That whole 'someone sneezes and everyone catches the cold thing? Totally as advertised... Or was that a warning.... So who thought all this linking all the worlds financial systems together thru this great little gift, this manna from heaven called global capitalism was a good idea and why again??? Cause I know this linkage shit didn't just happen suddenly last week... And while Nafta might have got this snowball rolling in the 90's it didn't really start there either.... Ya know, I have never been sold on this whole notion of free market capitalism rendered worldwide as practiced by the 'astute' geniouses down on Wall St..... But then I don't go to Vegas and gamble my paychecks away either. I ignore three card molly pitches on the street too...........JD
Pakistan should tell the Bush Administration they will release the information of the criminal acts the US did and what Pakistan was threaten to do and they will get what ever they want. We gave 800 billion dollars and he is spending it on everything but the bailout. AIG was given 85 Billion dollars of the taxpayers money and they took a 500,000 million dollar vacation for staffers and not a dime going to help the people. Lehman Bros. gave Jeb Bush big bucks as a consultant for finance and the Director George HW Bush ( cousin to the President) got him millions five days before the public learned the truth. So I look for other countries to bleed money as Americans aren't doing much about it.
bush wanted a legacy. well, he has one the whole
planet is now in a depression and the world economy
has been flushed down the toilet by hand.
i am not a member of the nra, but
the anger i have for the bush/cheney administration's
1000+ crimes, just makes you want to invite them both
over for a target practice, but then we are civilized
and it's preferable by social standards to just thank
them for fucking you over.
not me, bush and cheney you can go FUCK YOURSELVES!!!
shit... I'm broke too...howzabout a handout for me?
I've had a hell of a time finding a 7-elevan store that's not closed in my area, this explains it!
If so, I missed the joke.
We must move beyond money and the systems that enslave us all regarding it...
We must make this shift as a species...
The new paradigm is something totally different.
New Ideas must be embraced..
The time is now.
Haven't we been sending $10mil a month to Pakistan for a while now?
Not another penny!!!!
/glass parking lot
I'm astounded at the ignorance of some of the posters here, on this thread. Pakistan has been your "ally", and Musharraf propped up with US money. He's ruined the country financially, and probably absconded with a lot of loot. Now the people are desperate, largely because the USA backed the wrong horse, for the wrong reasons. Do you really want another 160,000,000 angry America-haters on the borders of Afghanistan and Iran? With nukes. Wake up. It's another neocon mess.
I don't know Edwin. Pakistan hasn't had a non corrupt leader to a greater or lesser degree since its' creation. I doubt the present incumbent is much different in that respect from Musharraf. Can a nuclear armed state be allowed to fail? The consequences of that would very likely put us all into "interesting times" to use the Chinese description.
Exactly. A nuclear armed state, in chaos. Not what is needed in the Middle East right now. Congress did add $180 billion in pork on the bailout. I guess it's a matter of what their priorities are. Re-election, seems to be top.
Let's see, just how much has "Bush" spent the last 10 days? Anyone got any idea? The bailout, the Fed ($650 billion), the $25 billion for automakers, the... Really, anyone know??? The shell game contiues.
Here's $100B, you can have it if you give us all the keys to your nuke facilities.
OPEC nations require that oil be bought in US dollars. Why can't pakistan buy oil from non-opec nations?
Just wait until the Saudis dump our dollar. That's when the real fun will begin.
Pakistan wants a $100 billion from the international community. Gee, what are they going to do if they don't get it. Welcome Al Qaeda and/or the Taliban with open arms into their communities? Maybe nuke India? I'm sure Dick & George would be happy to throw a few bucks there way, they have been that anyway all along. Question is where they going to find the money? This country is broke. Don't think they can have more printed...the paper and ink is too expensive.
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